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Wednesday, November 25, 2009

Wellstone-Domenici Mental Health Parity Act

Mental Health Parity is coming to a health insurance plan near you on January 1st, 2010. The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (commonly known as the Wellstone-Domenici Parity Act) was enacted into law on October 3, 2008. After a long lag time, most insurance plans are required to be in compliance with this law by the first day of the new year.

This bill is designed to end the health insurance benefit inequity between mental health/substance use disorders and medical benefits for group health plans with more than 50 employees. This means that there cannot be arbitrary limits for the coverage of biologically based conditions (e.g., 12 sessions a year for the treatment of depression if there are no similar limits for medical visits).

It is estimated that under this law, 113 million people will have the right to non-discriminatory mental health coverage.

Massachusetts has had a parity law for sometime. However, under this law individuals who are enrolled in self-funded plans (fully funded by the employer) were not covered by the parity law in the Commonwealth. This is changing on January 1st, 2010.

There are some important caveats. Mental health and addictions coverage is not mandated. No insurance plan is required to offer this type of coverage. Mental health coverage is offered at the discretion. An employer can elect to purchase a plan that offers no benefit at all. Additionally, companies with less than 50 employees are not required to provide parity. Lastly, there is a cost exemption. If, after six months of meeting the requirements of this law, a company can demonstrate and have certified by a licensed actuary that the costs of providing this coverage are excessive, their group health plan can be exempted. Excessive is defined as an increase of the actual total costs of coverage by two percent during the first year or one percent in subsequent years.